Industry Week in Review – August 21, 2015

The Pentagon plans to increase the number of drone flights per day from its current 61 flights to 90 flights by 2019, representing a 50% increase over the next three years. This is the first significant increase since 2011, as pressure has been mounting on military efforts to address recent global events.

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What Will this ‘Hunting Season’ Bring to M&A Volume?

For many government contractors, the final quarter of the government fiscal year (“GFY”), from July to September, presents an opportunity to secure additional funding as agencies attempt to spend the remainder of their budget for the year. This concentration in spending can be partially explained by a few factors.

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Industry Week in Review – August 14, 2015

Warren Buffet’s Berkshire Hathaway has agreed to purchase Precision Castparts (“PCP”) for $37 billion, approximately 14x PCP’s LTM EBITDA. This deal is the largest purchase by Mr. Buffet to date, and demonstrates confidence that airlines will continue to drive positive momentum for the aerospace manufacturing market.

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Industry Week in Review – August 7, 2015

In an effort to increase national defense spending, defense contractors have ramped up lobbying efforts in Washington. In the second quarter of 2015, the top 50 defense contractors spent over $58 million on lobbying, an increase of 28% from the same quarter last year. The two firms with the largest investments, General Dynamics and Lockheed Martin, spent a combined $6.2 million during 2Q15 on defense issues.(1) Since 2011, the defense base budget has decreased from $528 billion to $496 billion due to budget caps.

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Industry Week in Review – July 31, 2015

Italian aerospace and defense group Finmeccanica has taken DRS Technologies off the market following results that beat expectations for the first half of 2015. Finmeccanica acquired DRS, a U.S. defense electronics business, in 2008 before major cuts in defense spending. Last summer, CEO Mauro Moretti indicated his plans to sell DRS as part of a business review and debt reduction program.

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Industry Week in Review – July 24, 2015

Lockheed Martin has entered into a definitive agreement to acquire Sikorsky Aircraft from United Technologies Corp (“UTC”) for $9.0 billion approximately 13.0x Sikorsky’s LTM EBITDA. Lockheed Martin estimates the transaction will generate ~$1.9 billion of tax benefits over the next several years.

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Industry Week in Review – July 17, 2015

Bombardier Aerospace will likely experience delays on another program in the coming months as it has announced a “full review” of its new Global 7000 and 8000 business jet programs. The announcement of the review follows continuing revenue pressure, cost overruns, and other demands from the CSeries airliner as well as its halt in production of its Learjet 85 program.

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Ripe Market for Small Business Contractors

For the second consecutive government fiscal year, the Small Business Administration announced that the Federal government had exceeded its spending goal for small business (“SB”) prime contracting (the most recent previous year where this was achieved was FY2006).

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  • Authors

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    Robert D. Kipps

    Mr. Kipps has over 20 years of experience in providing transaction advisory....

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    Kevin P. DeSanto

    Mr. DeSanto has a broad base of experience in providing transaction advis...

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    Michael J. Misantone

    Mr. Misantone has a broad base of advisory experience in the aerospace, defense, and...

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    Karl M. Schmidt

    Mr. Schmidt is a Managing Director at KippsDeSanto & Co., with vast exp...

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    Marc B. Marlin

    Mr. Marlin has a broad base of experience in providing transaction advisory services...

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    Jon Yim

    Mr. Yim is a Director at KippsDeSanto & Co., with a broad base of experience...

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    George “Toby” F. Albright, III

    Mr. Albright is a Director at KippsDeSanto & Co., with a broad base...

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    Robert G. Dowling

    Mr. Dowling has a broad base of experience in providing transaction advisory...

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